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The topic of discussion was banks, and Abraham J. Briloff was warming to his subject.

Many have complained, he observed, "that these powerful financial institutions are withholding the data which are really vital for the full comprehension of the spectrum of activities in which the entities are engaged." What's needed, he asserted, wasn't just full disclosure, but a corporate accountability commission—a government body that would look out for the interests of the "total economic society."

A bit of Monday-morning quarterbacking about JPMorgan Chase's recent $2 billion-plus fiasco? Or a criticism of the public-be-damned attitude that figured in the 2008-2009 financial crisis? Hardly. The quotes aren't hindsight but prophecy: They're from his testimony before the Senate Banking Committee on July 11, 1975.

Blind but still feisty, 94-year-old Abraham J. Briloff is aided in his research by his daughter Leonore.
Jennifer Altman for Barron's

Briloff has a monotonous tendency to be right—and to be right years, even decades, before anybody else. Just about every major accounting reform that has been enacted in recent years had been urged upon a surly profession and a reluctant Congress by this stubborn, acerbic—but always courtly—professor of accounting at the City University of New York.

Briloff was an early opponent of accounting firms' providing management advisory services to auditing clients—he saw it as a clear conflict of interest—and was jawboning about the need for stronger internal corporate financial controls long before they were required by the Sarbanes-Oxley law in 2002. He has for years—decades, really—sounded the alarm about accounting practices that mislead investors, be they "pooling of interests" after mergers or off-balance-sheet chicanery.

Since the 10th anniversary of the passage of Sarbanes-Oxley is approaching, it was as good a reason as any to meet with Briloff recently in the modest, ranch-style house in Great Neck, Long Island, that has been his home for 60 years. It was an opportunity—or, perhaps, to use one of his favorite words, a privilege—to hear the reflections of a longtime lion of ethics in American business.

Briloff turns 95 on July 19. He has been sightless for the past 10 years; his handicap began with the first signs of glaucoma in the mid-1960s and has progressively worsened.

BRILOFF TESTIFIED BEFORE CONGRESS 15 times from 1970 through 2002, providing insights on every major corporate and accounting scandal during that span, from those involving E.F. Hutton to Enron, providing a counterpoint to the excuses and prevarications of bamboozled accountants who'd worked on those companies' books and failed to see disasters coming. Over the years, he became the bête noire of his profession, a one-man Greek chorus chiding the large accounting firms, the Big Eight (now just the Big Four) for everything from stodginess to sloppiness to rampant conflicts of interest. He is a longtime critic of Generally Accepted Accounting Principles, which he thinks often don't give a realistic picture of a company's financial health. And he's taken his profession to task for "the myth of fairness," a theme of his 1976 book More Debits Than Credits.

Despite the years of struggle, sometimes futile, Briloff isn't cynical or defeated. Conversations with him reveal a man who certainly isn't the narrowly-focused, technically-oriented, green-eyeshaded bean counter of popular stereotype, but rather a crusader with a fervent passion for justice and equity, laced with a stern but gentle Old World sense of morality. He views himself not as whistleblower or gadfly, but as a defender of his profession, inspired by his mentor and former professor in the 1930s, Emanuel Saxe.

In fact, until his retirement from the City University of New York's Baruch College in 1987, Briloff was the Emanuel Saxe distinguished professor of accounting there. His lectures in introductory accounting were part of the required curriculum for students aiming to become certified public accountants, but were eagerly attended because Briloff did more than just recite rote nostrums.

"He wanted us not just to be bean counters but to look under the hood, to analyze the numbers, to question the validity of financial information," says Sam Antar, who attended Briloff's lectures while he was a student at Baruch in the late 1970s. Briloff's principles took quite a while to sink in for Antar, who, with his cousin Eddie Antar, masterminded the Crazy Eddie electronics-chain stock fraud of the 1980s, but now authors a blog (whitecollarfraud.com) that targets white-collar crime.

In his politics, Briloff is an unabashed liberal Democrat who vividly remembers Franklin Delano Roosevelt's inauguration in 1933, and is aghast at what he believes to be the callousness toward the poor of the Republican candidates for president. He is troubled by income inequality and feels a sense of kinship with the Occupy Wall Street movement.

THIS IS HARDLY SURPRISING, for Briloff is very much a dissenter. But unlike today's young rebels, the old warrior has gradually seen some of the ideas he has advocated for years implemented in policy. The Sarbanes-Oxley law of 2002 (SOX, for short), which was enacted in reaction to the Enron scandals and other corporate debacles, incorporated views on auditor independence and corporate responsibility for internal controls that Briloff had pushed as far back as the 1970s.

Asked about SOX, now under attack in Congress, Briloff comes alive. He tends to ladle out his words carefully, professorially, but now he is exuberant. "It's beautiful!" he exclaims. "Beautiful! Beautiful! The trouble is that it is not being implemented."

He points to the
JPMorgan ChaseJPM 0.19410717176622957%JPMorgan Chase & Co.U.S.: NYSEUSD61.8899
0.11990.19410717176622957%
/Date(1425419264637-0600)/
Volume (Delayed 15m)
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10813648
P/E Ratio
11.388786764705882Market Cap
230297894992.819
Dividend Yield
2.5825195706561215% Rev. per Employee
406463More quote details and news »JPMinYour ValueYour ChangeShort position
(JPM) trading disaster with disgust, asking where the controls mandated by Sarbanes-Oxley were. And he's disdainful of the anti-regulatory stance taken by the bank's CEO, Jamie Dimon. Says Briloff: "You had all that cock of the walk and underneath was all that rot. Somehow, I can't help but feel he had manifested the arrogance of power. Or is it the power of arrogance?"

To reinforce his point about the need for sterner implementation of SOX, Briloff cites
American International GroupAIG -0.12578616352201258%American International Group Inc.U.S.: NYSEUSD55.58
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/Date(1425419259674-0600)/
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4680359
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10.608227956743148Market Cap
76376067450.6165
Dividend Yield
0.8989572096368212% Rev. per Employee
981769More quote details and news »AIGinYour ValueYour ChangeShort position
(AIG), whose out-of-control involvement in credit-default swaps led to a $180 billion bailout by U.S. taxpayers during the financial crisis. "The critical thrust of Sarbanes-Oxley is internal controls, internal controls, internal controls," he says. It requires certification under oath from corporate financial officers and independent auditors, after performing a risk assessment. That is arguably the measure's most disliked provision. Many critics contend that its costs far outweigh its benefits, and that it unduly penalizes small business.

In contrast, Briloff asserts, the AIG episode demonstrates why SOX should be retained and enforced. In 2007, "before the deluge," he points out, AIG engaged in "extensive discourse on the fact that they cannot certify regarding their internal controls, because of the fact that they have all these swaps and derivatives and so on. But then, Pricewaterhouse nonetheless proceeds to certify. Now, one might assume that if you can't say positively that the system of internal controls is effective and operative, you cannot certify," he observes. Pricewaterhouse wouldn't comment. But in a February 2008 SEC filing, it did warn of a weakness in AIG's internal controls. However, Briloff says that was too late.

Briloff doesn't blame the SEC for the failure to implement SOX. The agency, he says, has "the most limited resources to be pursuing the extraordinary responsibilities that they have." He believes that the ultimate responsibility lies with his profession.

Unfortunately, he complains, accountants have "quite regularly now, regrettably, become business and industry rather than professions, manifested by the fact that they all now have acronyms—LLPs, LLCs, and all the other garbage."

Briloff doesn't believe that government can supplant accountants in making sure that companies' finances remain honest. And he remains somewhat of an idealist. Does he still believe in the industry's self-regulation, after all the conflicts and problems he's seen over the years? "Oh, of course!" he exclaims.

Briloff's embrace of self-regulation isn't really surprising. He yearns for a return to simpler times, when accountants were professionals, looking out for the public interest. A passion for morality and ethics—over his long career, he has practiced accounting, as well as teaching it, and he still has active clients—is a theme that runs through his long battle with the accounting establishment.

The zenith, or perhaps the nadir, of this struggle came in the mid-1990s, when the American Institute of Certified Public Accountants, which Briloff had long criticized, filed an ethics complaint against him. The AICPA's ethics panel contended that Briloff had violated ethical rules in his audit of a nonprofit group. It said that Briloff should have gotten a letter from the client, certifying that he'd provided correct information. The client had already certified this on a tax return, but the AICPA still wanted its pound of flesh. It ordered Briloff to take 31 hours of refresher courses in accounting and auditing, including seven hours of remedial education in ethics. Briloff called the penalty "unwarranted and personally offensive."

SOME VIEWED THE MOVE as transparently retaliatory. Floyd Norris of The New York Times wrote that it "may be the dumbest ethics investigation ever initiated by a profession." But the AICPA stuck to its guns, upholding the findings of its investigative panel. It remains as an example of the accounting profession's antagonism toward Briloff and its resistance to change.

"The AICPA did not look good," says J. Edward Ketz, co-author of the Grumpy Old Accountants blog and an accounting professor at Penn State. "It was foolish of them to proceed that way." Despite the passage of so many years, the AICPA still won't comment on the disciplinary proceeding.

While Briloff isn't about to win any popularity contests among his peers, he is hardly without recognition. One example comes from an unlikely source—the entertainer Harry Belafonte's autobiography, My Song: A Memoir, published last October.

Belafonte recounts the time in 1963 when he paid for some of Martin Luther King's housekeeping expenses, and then considered putting them on the books of his corporation as a tax-deductible expense. But Briloff, his accountant, urged him not to do so. Briloff recalls telling Belafonte that, although this would have been permissible under the law at the time, if his return was audited for any reason, King might be put in an embarrassing position, regardless of its outcome.

Sure enough, there was an IRS audit, which Belafonte passed with flying colors. but Briloff had been right, as usual. In his book, Belafonte thanks Briloff, saying that his "moral clarity, strength of conviction and caring attention made me keep my eye on the sparrow."

Despite his blindness, the ole master clearly sees the key issues in any accounting situation. Asked to explain his working process, Briloff, with a classical music station playing gently in the background, answers: "It begins with some sensitivity as to where the problem might be. Somehow, there's a serendipity where I know that there's an issue out there."

These days, his daughter provides substantial help in doing his research.

He asks Leonore, who is a CPA, to "bring together for me some of the matters that are in my mind, in documents. The numbers reverberate in my mind, and then I turn to her and say, 'Get for me the data in these areas,' or 'Read such-and-such to me from whatever document you might find.'"

He records his thoughts on tape, on one of the several recorders that he keeps on the desk in his study, and then he reflects further. When he goes to bed, the numbers still dance in his mind, and he keeps a tape recorder beside his bed.

It is as if he can see the numbers, much as Beethoven could hear the melodies even though deaf. As new numbers come in, he incorporates them into his thinking, to confirm or reject his original hypothesis. He was in the midst of pondering a corporate accounting issue at the time we were chatting. Questions were leading to other questions, which he describes as "almost a sequel to The DaVinci Code.

"Something hits. You say, 'Why is it there?' Or something that should be there, isn't there," he says. He performs the most critical calculations in his head. (Doing this is akin to balancing a checkbook with your eyes closed.) "I do have a good retention in my memory," he explains.

IT IS AN EXCRUCIATING PROCESS, but he will do so for as long as he can. It is his life, and also his lifeline. "I enjoy the challenge," he says, "because, frankly, I don't believe I could continue to live meaningfully—I might be able to survive—if I didn't have that kind of a challenge still ahead of me."